Special Bd. of Aldermen — 12/20/2018 Page 5
| don’t Know who we are going to use, the one group that has been very, very active in New Hampshire of 95%
of the deals | have done is US Bank out of St. Louis, they are very active in this. Remember there are other
tax credits too that these investors are used to getting involved in. There is the Historic Tax Credit that you get
for rehabbing historic buildings in your historic district, which works very similarly to this. It is a 20% credit
taken over 4 years and there is a low income housing tax credit that institutions such as Chase and Merrill
Lynch and Bank of America and US Bank invest in on a regular basis.
So that is it for now, | would be glad to answer any questions you may have.
Mr. Cummings
Before we get there, may | just — one thing. | just wanted to take what Niel said and give you a real life example
of what was done here in New Hampshire. This is the deal structure that Keene went through for their library
project. This is essentially the very high level overview deal structure that Keene went through for their library
expansion project to be clear. So the City of Keene, they had equity of $2.5 million that was the current
building and land, they had about $8.96 in a loan which was a bond, bond proceeds, they took the $8.9 put it
into this leverage lender model and that leverage lender moved the money over to the CDE The CDE then
leveraged it with the equity investment by US Bank of a full total of just over $5 million, but that wasn’t what
was actually in the project itself, the project netted $4.3 million of cash for a total of about $13 million dollar.
The $13 million was eventually pushed down into the QALICB. The QALICB then separately the City of Keene
transferred the $2.5 down into the QALICB for a $15 million dollar project which then they were the ultimate
operator and master tenant of the library. This is how Keene structured theirs
Mr. Cannon Itis a standard structure. And just one more thing, one of the advantages of this is Keene’s
counsel has done this twice now, for the courthouse and this and is talking to your counsel, so that is really
going to help | think and smooth the deal along as we go forward.
Mr. Cummings
So my last comment that | want to make is to make this all happen there is going to need to be approvals by
the Board of Aldermen along the way. Some actions that will be necessary: development agreement,
approval to push, if you will, the $12.9 down through the system, a transfer of 201 Main Street into the
QALICB, approval of a Master Lease. So there are going to be 4 or 5 resolutions that are going to come
before this body that we are still trying to understand and still try to figure out as we are putting this deal
together. But we are going to need those approvals to ultimately make this work.
A couple of other points | want to make, as you can note, we are only suggesting $12.9 million in this model;
we have authorization for $15.5 so approximately $2.5 million wouldn’t necessarily have to be pushed through
this model. That could be used still for the project or not used at all, and maybe you could potentially reduce
the bond obligation, or if there are other items within the project that you would like to undertake that isn’t in the
current scope, you could use some of that money for, if you will, upgrades or amenities.
Lastly not shown on this deal structure flow chart but is still coming together is the private investment that
would be coming from local charitable contributions which we are targeting at approximately $2.5 million. That
would be a separate non-profit that would be involved with transferring basically those private dollars into the
operator to make that work as well. So that would be underneath the City of Nashua Master Tenant, there still
could be 2 or 3 boxes that are evolving as we are putting this all together.
This took about 3 to 4 months of really serious back and forth with Niel and other members of the team here in
City Hall to get a comfort level to understand the direction we are going and it is constantly evolving. When we
first started this, it looked very similar to this but there were slight differences and tweaks along the way. | just
want to make sure you all understand that this will continue to get refined as we move forward. What we
wanted to do tonight was to introduce the concept, give you a high level overview, have you comfortable with
